-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI: Tankan Supports BOJ Virtuous Cycle View, Costs a Worry
Both large and small Japanese firms have revised their capital plans upwards from three months ago according to the Bank of Japan's June Tankan business survey, a result which underpins the BOJ's 'virtuous cycle' view, MNI understands.
However, the Tankan highlighted that firms are suffering from higher costs caused by the rise in raw materials, and they are having difficulty in transferring the added costs to retail prices, squeezing corporate profits.
The diffusion index for sentiment among major manufacturers stood at +14 in June, up from +5 in March, registering the fourth straight rise, although the median forecast was +15. The index is projected to fall to +13 in September.
June's +14 is the highest level since December 2018.
The Tankan also showed that the K-shaped path for the economy was clearer, but the difference between manufacturers and the face-to-face services will reduce in the three months ahead as the pace of vaccinations accelerates.
Central bank economists are focused on reliable revised capex plans in the June Tankan survey to gauge whether businesses are maintaining their solid capex plans, and whether a virtuous cycle continues.
The Tankan showed capex plans by major firms were revised up to +9.6% from March's +3.0%. Capex plans by smaller firms were also revised up to +0.9% from -5.5% in March.
The Tankan showed that businesses are suffering from higher costs caused by the rise in raw materials in addition to the negative impact from the yen's fall.
As for changes in input prices in manufacturing, the DI of "rise" minus "fall" rose to +29 in June from +15 in March.
As for change in output prices, the DI rose to +4 from -2 in March, meaning that businesses have not transferred high costs to retail prices.
BOJ officials are paying attention to how the higher costs will squeeze corporate profits and affect a virtuous cycle from income to spending.
The Tankan also showed both major and smaller firms continued to suffer from labor shortages, easing concerns over a worsening of the labor market situation caused by the pandemic disruptions.
The survey continued to show the corporate financing environment remained accommodative, supporting the BOJ view.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.